How it's calculated
- Parcel weight = packed weight of one unit × units + box and packing weight
- Under a pound, the parcel is priced at the ounce rows. From a pound up, its weight is rounded up to the next whole pound
- Label = the price USPS prints for that weight in the zone
- Contribution margin in a zone = revenue − unit cost × units − pick and pack − extra picks − packaging − that zone's label − card fees − refund reserve
Every figure on this page comes from Offer Suite's own margin engine, the same code the product uses to forecast each offer's and option's profit and to compute realized margin on orders. Money is computed in whole cents.
Worked example
A 12 oz bag of coffee in a 3 oz mailer makes a 15 oz parcel, priced as under 1 lb. USPS Ground Advantage's commercial price for it is $7.33 in zone 1 and $8.95 in zone 9; to zone 5 it is $8.24.
The bag sells at $40.00 with free shipping. Shipped to zone 5 the order keeps $14.62; the same order keeps $15.53 in zone 1 and $13.91 in zone 9. A second bag makes the parcel 1 lb 11 oz, priced as 2 lb: $10.50 to zone 5, not twice the first label.
Assumptions
- Label prices are USPS Ground Advantage's commercial parcel prices in Notice 123, effective 4 October 2026 and read 13 October 2026. USPS changes them several times a year; the notice has the current ones.
- Commercial prices are what a shipping app or a postage account pays. Retail prices at a post office counter are higher, and a negotiated contract can be lower.
- A parcel is priced on its weight alone. One larger than a cubic foot is priced on its size if that comes out heavier, and one over 70 lb is not carried by this service; neither is priced here.
- Every unit ships in one parcel.
- Pick and pack $1.18 per order and $0.20 for each extra item are the defaults of the engine's DTC-US profile, a typical third-party warehouse contract. Use your own contract.
- Card processing of 2.9% + $0.30 is Shopify Payments' online rate for a standard card on the Basic plan in the United States. The Shopify Payments fees pages list every plan and country; enter yours.
- The refund reserve (5%) is a share of revenue set aside for refunds. Cost is not reduced by a refund, because the goods were already picked and shipped.
Questions
How is shipping cost calculated by weight and zone?
Weigh the packed parcel, round it the way the carrier does, and read the price for that weight in the zone of the destination. USPS Ground Advantage prices a parcel under a pound at one rate per zone and every pound above it at its own, in nine zones.
What is a shipping zone?
A band of distance between the ZIP code a parcel leaves from and the one it goes to. USPS uses zones 1 to 9: 1 is local, 8 is the far side of the country, and 9 covers a few Pacific destinations. The same parcel costs more in a higher zone.
Why does a second unit not double the shipping cost?
Most of a label's price is for the parcel existing at all. Two 12 oz bags in one box weigh under two pounds and ship to zone 5 for $2.26 more than one, not for twice its label, which is why a bundle earns more per order than two singles.
Which zone should I plan on?
Your shipping app reports the zones your parcels went to: use the one most of them fall in, and read the table for the rest. Shipping from a second warehouse lowers the zones, and the table shows what a lower zone saves per order.